Why would a customer hire a big company over a 1 man shop?

[kwired]

That is a choice you make, other owners do in fact decide not to work for certain customers, we see them say so often on this and other forums.

Bob you as a representive of your company don't want to get into it with a deadbeat customer, that is understandable - you do have someone higher up to send this customer to if you don't want to deal with them anymore - you may have to put up with some crap from your boss for doing so but maybe you would rather do that than continue to deal with the customer.

Owners have no one else but hired people to turn to, but they should realize this when they decide to become owners.

If you don't want to do a job you don't have to be rude to a potential customer, you can always tell them you can't do it, you are too busy, or give them reasons why you will not do it the way they want it done that jeopardizes your liability, or even give them a high price in hopes they will look for someone else to do the job.

 

[cowboyjwc]

Another thing I thought of today, as I was driving by one of our parks and saw an out of town concrete company vs. one of our local guys. Is sometimes to, depending on the project, many of the 1 man shops don't carry enough insurance to even work on the small capital works projects or it may be the policy of some of the larger companies that contractors carry "X" amount of insurance just in case you burn the place down by accident.

 

[480sparky]

Another thing I thought of today, as I was driving by one of our parks and saw an out of town concrete company vs. one of our local guys. Is sometimes to, depending on the project, many of the 1 man shops don't carry enough insurance to even work on the small capital works projects or it may be the policy of some of the larger companies that contractors carry "X" amount of insurance just in case you burn the place down by accident.

$1mil is usually minimum. $2-5mil isn't that much more. And even if a 1-man shop has just the $1mil, it's just a matter of making a phone call and writing a small check to get the additional coverage.

 

[resistance]

Everyone is making good points! But I can tell you this, most [not all] larger shops (note: the people make-up the company) have less experienced electricians (and helpers), violate rules more often (Example: apprentices working without the proper supervision), are infested with drug users, have a high turn-over rate, too many politics, racism, discrimination, favoritism, brown nosers, lazy electricians (not apprentices) who spend most of their time on breaking (note: When i got my license, I had to work harder. Note 2: I still thank Hurk and a few others on here that help me study. I passed my example the first time<<<this was years ago) and very poor customer service. I’ve worked for three large companies, and the above was always evident. Not only that, they limit their electrician to specific jobs. Example: An electrician will do only trim work. WOW!! This is why I jumped around, so I could get my hands in all aspects of the trade (meaning: Rough and trim work [new and old construction]. I would pick a small company any day, but there is an advantage and disadvantage to everything!! One disadvantage to having a smaller one man shop, is being exposed to installing electrical on a regular basis—so you loose your edge.

 

[resistance]

Excuse the typo?s above. I tried to correct them, but the site blocked me:rant::blink:

 

[petersonra]

Everyone is making good points! But I can tell you this, most [not all] larger shops (note: the people make-up the company) have less experienced electricians (and helpers), violate rules more often (Example: apprentices working without the proper supervision), are infested with drug users, have a high turn-over rate, too many politics, racism, discrimination, favoritism, brown nosers, lazy electricians (not apprentices) who spend most of their time on breaking (note: When i got my license, I had to work harder. Note 2: I still thank Hurk and a few others on here that help me study. I passed my example the first time<<<this was years ago) and very poor customer service. I’ve worked for three large companies, and the above was always evident. Not only that, they limit their electrician to specific jobs. Example: An electrician will do only trim work. WOW!! This is why I jumped around, so I could get my hands in all aspects of the trade (meaning: Rough and trim work [new and old construction]. I would pick a small company any day, but there is an advantage and disadvantage to everything!! One disadvantage to having a smaller one man shop, is being exposed to installing electrical on a regular basis—so you loose your edge.

I don't know about the drug user issue. Most if not all of our customers require drug testing before a contractor employee is allowed on site. and it has to be redone annually. I have had to piss in a jar a number of times. So have all our other engineers AFAIK, as well as most if not all of our shop employees.

 

[resistance]

I don't know about the drug user issue. Most if not all of our customers require drug testing before a contractor employee is allowed on site. and it has to be redone annually. I have had to piss in a jar a number of times. So have all our other engineers AFAIK, as well as most if not all of our shop employees.

Not all companies will be the same. Example: They just busted a large construction company here (Awarded a 10 million dollar contract—using tax payer money). Most of the employees where drinking alcohol during work hours, on the job site. Yet, our State Law says: Drinking alcohol on the job site is prohibited. My point: People will do what they want when they want. Because a company is having drug test doesn’t mean they will catch all the bad apples! I’ll never forget working with an electrician (I was an apprentice at the time) that got pissed-off when he showed-up on a job site that had loose ends. He kicked a hole in the drywall (Note: House was almost ready to be put on the market). When I reported him, I was laid-off two weeks later. Isn’t that interesting!!!

 

[ritelec]

I'm a little surprised by the ignorance shown in this thread by folks who should know better. I think it's because folks are so close to the trees they can't see the forest. So, let me describe the development of an imaginary business.

Sparky had a good career as a journeyman. His boss, and customers, loved him, so he often had 50+ hours of work each week. So, Sparky decided to go out on his own.

That's when Sparky got hit- life got him coming and going. Sure, he could bill at 'shop rates' now, but he also found new expenses every step of the way. Every hour he could bill for was offset by two hours he couldn't bill for- time spent on the road, meeting with customers, running for parts, pulling permits, making drawings, witnessing inspections, etc.

Sparky had been working 10-hr days, and getting paid for ten hours. Now, there just isn't room in a day for ten 'working' hours, plus 20 'support' hours, plus time to simply live. Even if there were, Sparky can't be on the job site AND in city hall at the same time. He's spending all day bouncing around like a ping-pong ball.

So, Sparky hired a helper. Trouble is, that helper had to do enough work to pay for both of them. That's a pretty heavy load.
Sparky was also spending a lot of time driving - which meant he couldn't be fielding calls, making follow-ups, researching parts, etc. He also wasn't at his 'office' to accept deliveries, etc. So, Sparky got his wife's neice to sit by the phone all day. Now that helper's workload has to support THREE people.

Then, the helper missed some time, simply because his 250,000 mile, 12-yr. old pick-up had something break. One also has to admit that the appearance of the truck did not inspire Sparky with any desire to hang his name & number from it. Oddly enough, Sparky DID have folks walk up to HIS truck, write down the info, and call.

Can the helper work hard enough to pay three people AND buy a new truck? I don't think so. That workload needs to be shared.

So, Sparky adds a few guys. He leases four trucks. Now he has four guys in the field, whose work pays for six people. Sparky is now free to pursue business. The phone girl is a lot busier now that there are five trucks (4 leased and Sparky's) spreading the word. Each guy in the field has his work pay for 1-1/2 people.

Financially, that's a lot easier than having one mans' work pay for 3 people and a truck.

Plus .... well, by golly, if Sparky takes a vacation, there are still folks to answer calls. Sparky can go to the Bahamas and actually relax - not field panic calls all day.

ONE MAN shop here...........but wow, nice ..........TY

 

[resistance]

It?s real easy to talk, but there is more to sparkies story. One being: finding money.

 

[480sparky]

I'm a little surprised by the ignorance shown in this thread by folks who should know better. I think it's because folks are so close to the trees they can't see the forest. So, let me describe the development of an imaginary business..............

My version goes like this:


Years ago, Joe Sixpack got a job as a helper for Fly-By-Night Electric. He started out working with a journeyman wiring houses for Cut Corners Construction. Joe turned out to be a pretty good electrician, learning fast and working hard. As the years went by, Joe got pretty good at wiring houses. Soon, he was running the jobs himself, and had his own helper.

Then recently, Joe got to thinking. "Fly-By-Night charges Cut Corners ten grand to wire a house. I know I get paid about $1500, and my helper gets $1000. I know the material costs around $2500.......... so that means the boss is making five grand just sitting at the office endorsing checks!"

So Joe decides to strike out on his own. "Man, this'll be great! I'll charge just $7000 to wire the houses, and with only $2500 in material, I'll pocket $4500 for each house I do....... Jeez, that's more than three times what I was making for 'the man'!"

So Joe hangs out his shingle. . He doesn't have any health insurance, thinking he'll get that later when things really get started. Suddenly, he realizes he needs to be licensed. So he takes the test, and spends more money for the test and license. He also doesn't understand that driving his own truck costs money, both in gas, repairs, insurance, etc

All fired up, he gets his first job for Cut Corners. Right from the start, Cut Corners wants a current liability insurance certificate. So Joe forks out $3000 for insurance. A few weeks later, he gets a letter from the state saying he's not a registered contractor. So another $600 is spent. Oh, yea, the city says they need $1250 for a permit.
A few days into the first job, Cut Corners says they need temporary power. Joe didn't figure the cost of a temp pole into the job, but he builds one and gets it hooked up. Joe finds out he needs more than a 3/8" drill and 4-foot stepladder. So he goes out and buys more cords and a couple ladders. Every time Joe needs material or another tool, he'd drive down to Home Depot and whip out the plastic. Pretty soon, he realizes he's a couple days behind schedule. Why? He's working alone, and doesn't have his old helper with him.

So Joe starts working 12-hours days, and a couple Saturdays as well. He skips his daughter's dance recital, and misses his son's Little league game. He comes home dirty, tired and grouchy, which cause his family to stay away from him.

By the time the house is roughed in, his credit card is maxed out and Joe needs to borrow money from his parents. "Just until I get this job done, then I'll be rolling in dough" he tells them. He borrows even more money just to buy the material he needs to trim the house. By this time, he has alienated his family and taken his credit rating down below 400.

And the sad truth is, by the time job is done, he's been paid only $7000 and has spent $14000 just to 'be in business'. So he tells Cut Corners the next job will be $8500, thinking he can 'make it up' on the future work. But even that 'extra' $1500 'from the next job' won't cover his $7000 shortfall. Besides, Cut Corners won't hire him again because Joe caused them to get behind on their schedule. And to add insult to injury, they found someone else to do the job for less.

Dejected, Joe goes home, only to find a letter from the IRS saying they want $3250 for the income tax Joe owes from that job. The state also wants $675 for sales tax. All the 'profit' Joe thought he was going to make went to pay his bills, leaving nothing to pay his parents back with.



And who did Cut Corners hire to wire their next house? Joe's old helper from Fly-By-Night!

 

[KVA]

The big thing with large companies is the stress of having employees. People think having more employees gives you more freedom and more money IN THEORY YES. In reality you have to deal with employees quiting, coming in late, not coming in at all, getting sick, taking time off, getting hurt, screwing things up on a job, getting into accidents with the company trucks, and worrying about having enough work for your crew.

Then you have to deal with hiring, firing, training, etc.. More employees comes with a ton more responsibility. If you think you can just find a perfect crew that does everything on point while you are in the Bahamas you are delusional:lol:

Yes 1 guy can only handle so much and bill so much but their are plenty of them out there. What it really comes down to is how much you want to make. Your not going to see many 1 man shops making over 60k a year net but a large company will easily but with a ton more headaches.

I live simple and don't need luxuries to be happy. As long as I am working and paying bills, have healthcare and money for retirement that's all i need.

 

[scrypps]

I used to work for a small shop of 3 guys at the most, now I estimate for a company that has around 25 employees. The larger shop is able to take a more formal approach, you can bet their paperwork is all lined up, they can back up their bids they very often have more than enough guys to speed through the process. Additionlly, they normally have the best connections, any weird part or light you need, they can get it without too much hassle.

I've seen one man shows get a whole lot done, so a big company isn't necessarily better, but it is most assuredly less of a chance gamble.

 

[kwired]

I used to work for a small shop of 3 guys at the most, now I estimate for a company that has around 25 employees. The larger shop is able to take a more formal approach, you can bet their paperwork is all lined up, they can back up their bids they very often have more than enough guys to speed through the process. Additionlly, they normally have the best connections, any weird part or light you need, they can get it without too much hassle.

I've seen one man shows get a whole lot done, so a big company isn't necessarily better, but it is most assuredly less of a chance gamble.

You touched the heart of the issue right there. Some of this info has been mentioned in this thread already but I will summarize. One man show will likely be pretty efficient, may cost less partly because he has less overhead. He may also be difficult to schedule as he is usually busy - he can only do so much and hiring the first helper is a bigger step and more overhead than hiring the second helper, so it is only done when it becomes absolutely necessary in his opinion.

Bigger company no doubt has more overhead and should cost more in general. They should however have the resources to be able to meet customer demands more easily. They will not always be as efficient as the one man show, and are more likely to have call backs. The majority of the guys are paid by the hour and don't care as much about making mistakes and callbacks, they get paid the same whether they get called back or not.

I remember one time I was at a new home during rough in and one of the plumbers guys was trying to drill holes for 2 inch pipe through wall studs with a dull hole saw. I mean it was bad enough it took several minutes and a lot of smoke to drill just one stud. I mentioned to him that the boss was too cheap to buy him good bits so he can get it done faster. He told me "I get paid by the hour, if the boss wants it to take 5 minutes instead of 15 seconds to drill a hole it doesn't matter to me, I still get same number of hours each week."

 

[Mike Lang]

I used to work for a small shop of 3 guys at the most, now I estimate for a company that has around 25 employees. The larger shop is able to take a more formal approach, you can bet their paperwork is all lined up, they can back up their bids they very often have more than enough guys to speed through the process. Additionlly, they normally have the best connections, any weird part or light you need, they can get it without too much hassle.

I've seen one man shows get a whole lot done, so a big company isn't necessarily better, but it is most assuredly less of a chance gamble.

I'm a 2 man shop depending on work load, recently it's been just me. I will agree that people feel that they're getting a better job from a larger company and feel comfortable using them. I understand, and I completely agree that they have the best contacts and contracts for that reason. I just dont agree with the small company misconceptions in all cases. I have more tools (except trucks) than most shops with 15 men. I've come in on similar jobs and completed in the same time frame as large shops. I'll work around the clock until it's done and I can understand how that worries some people. I think that most companies just want to see bodies on their jobs. Many times I see guys from a large shops taking 2hrs to set up a core drill (probably apprentices although that's who's on the job).
I agree on the gamble aspect because big shops have the man power for emergency situations and tight deadlines. For me trying to take the step up to a bigger shop I just can't justify buying the trucks and payroll and hope the work comes rolling in.
Sorry I guess I'm ranting a bit - I don't mean to sound harsh

 

[kwired]

I'm a 2 man shop depending on work load, recently it's been just me. I will agree that people feel that they're getting a better job from a larger company and feel comfortable using them. I understand, and I completely agree that they have the best contacts and contracts for that reason. I just dont agree with the small company misconceptions in all cases. I have more tools (except trucks) than most shops with 15 men. I've come in on similar jobs and completed in the same time frame as large shops. I'll work around the clock until it's done and I can understand how that worries some people. I think that most companies just want to see bodies on their jobs. Many times I see guys from a large shops taking 2hrs to set up a core drill (probably apprentices although that's who's on the job).
I agree on the gamble aspect because big shops have the man power for emergency situations and tight deadlines. For me trying to take the step up to a bigger shop I just can't justify buying the trucks and payroll and hope the work comes rolling in.
Sorry I guess I'm ranting a bit - I don't mean to sound harsh

Don't apologize, I could have written same thing you did word for word and it pretty much would apply to me.

I have had to come in after the fact behind larger companies and straighten out things that never worked right from the beginning. Things like that start to send out the message that the one to four man operations often have people that know what they are doing and they actually care that things are right when the project is done. Some larger operations that primarily do new construction have nobody on the crew that is capable of troubleshooting and when something doesn't work when they are finished they have a hard time with it and sometimes still leave things in semi non working order. When I come in to fix it I often spend more time figuring out what they did and usually find some simple little problem. Control circuit with wires run to wrong devices, or NO contact is used instead of NC or other simple things that is not too hard to troubleshoot.

One time I got called to a new home that I had nothing to do with, they had pretty high electric bill and had not been in house very long at all. I found the control wiring for heat pump was incorrectly connected and was running electric aux heat while it was also in cooling mode - oops.

 

[supra]

if having employees is COSTING your business money, you are hiring the wrong employees and are just plain stupid for keeping them around.

sure a large shop has higher overhead but it also has higher profit. it also has higher risk!

 

[kwired]

if having employees is COSTING your business money, you are hiring the wrong employees and are just plain stupid for keeping them around.

sure a large shop has higher overhead but it also has higher profit. it also has higher risk!

Well the idea is supposed to be that an employee will make more revenue than expenses

 

[ptonsparky]

I don't know what the definition of a big company is vs 1 man. We have been a 2 - 3 man shop for most of 20 years. Not really much different than the 1 man, with the exception I do not always have to take the odd hour service call and my back doesn't hurt. Right now I need to be a 5-6 man shop and the pressure to get in and out is increasing to the point of "get it done, we will worry about details later". Exactly the point some of you have made about larger shops.

Worse yet is, there are not 2-3 men available to increase my labor force. Just not here.

 

[kwired]

I don't know what the definition of a big company is vs 1 man. We have been a 2 - 3 man shop for most of 20 years. Not really much different than the 1 man, with the exception I do not always have to take the odd hour service call and my back doesn't hurt. Right now I need to be a 5-6 man shop and the pressure to get in and out is increasing to the point of "get it done, we will worry about details later". Exactly the point some of you have made about larger shops.

Worse yet is, there are not 2-3 men available to increase my labor force. Just not here.

There are not 2-3 men available that have the qualifications you want:happyyes:

 

[ptonsparky]

There are not 2-3 men available that have the qualifications you want:happyyes:

Probably so...breathing and able to show up in the morning are pretty tough requirements. Again, a big company problem.